Aveng interim results December 2013

Tuesday 25th February, 2014
Revenue increased by 11% to R27.7 billion (R25 billion). Gross earnings declined by 8% to R2 billion (R2.1 billion). Net operating earnings was down by 8% to R503 million (R544 million). Net attributable profit was 22% lower at R308 million (R394 million). In addition, headline earnings per share fell by 21% to 82.1cps (104.5cps).

The group will be seeking to optimise its current business portfolio focusing on cash management and financial returns whilst significantly reviewing its cost structures, operational efficiency as well as improving project delivery. The impact of changes in foreign currency and possible future labour disruptions on the results of the Group cannot be quantified. Key issues which will impact on the second half results are:
*the QCLNG and GCRT projects will remain a material financial risk to both profit and cash flow through to completion of the GCRT project and the outstanding claim processes and will continue to receive intense focus;
*under the leadership of the new Managing Director, Aveng Grinaker-LTA will continue with its turnaround initiatives;
*Aveng Manufacturing should benefit from the commissioning of the manufacturing plant in Tete in Mozambique with a specific focus on concrete sleeper products;
*Aveng Steel is expected to benefit from the strengthening of steel prices and improved sales volumes;
*For Aveng Mining:
**the Aveng Moolmans business unit will continue to manage its reduced activity and consequently revenue levels, whilst advancing preparations to ramp up its new contract awards that will be commissioned in the new financial year;
**the Aveng Mining Shafts & Underground business unit will focus on recovering margins at the two deep level shaft sinking contracts as well as preparing for its recent contract awards that will be commissioned in the new financial year;
*Aveng Engineering will focus on the execution of its Renewable Energy projects.

The Group anticipates improved trading conditions in the second half of the year against its comparative period.